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Rhythm LG Chem deal updated with 1% royalties and fixed payments

Nov 2, 2026, 10:11 PM EST1 sourcesAI-analyzed

Why it may matterVerify against the original reporting

The four-year $350M fixed payment creates near-term cash outflows and headwinds to EBITDA, likely pressuring valuation unless MC4R sales meet or exceed expectations. However, lower royalty rate could favor long-run economics if sales materialize; risk lies in uncertain product performance.

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What happened, with direct paths to the underlying reporting

Rhythm amended its license with LG Chem, lowering royalties to 1% of global net sales for MC4R agonists (setmelanotide, bivamelagon, RM-718). The agreement adds $350 million in fixed payments over four years, pressuring near-term cash flow. The shift trades lower ongoing royalties for fixed costs, potentially improving long-term economics if sales grow.

Rhythm sets MC4R royalties at 1% of global net sales.
Fixed payments totaling $350 million to LG Chem over four years.
Amendment covers setmelanotide, bivamelagon and RM-718.
Royalty reduction replaces previous low-to-mid single-digit rates.

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